New York State law protecting consumers from “surprise” medical expenses goes into effect

ALBANY >> Benjamin M. Lawsky, Superintendent of Financial Services, announced that a new law protecting New York consumers from getting hit with surprise, out-of-network medical bills goes into effect today. The Cuomo Administration proposed those reforms in 2014, which were then enacted by the Legislature as part of last year’s budget. Among other protections, the law holds consumers harmless from any surprise or emergency out-of-network medical bills they receive from providers, and requires enhanced consumer disclosures to protect patients from getting hit with surprise medical bills in the first place.

The New York State Department of Financial Services has received more consumer complaints about surprise, out-of-network medical bills than any other issue. Since 2008, the Department has received more than 10,000 complaints about insurance reimbursements from New York consumers.

Superintendent Lawsky said: “We have seen thousands of cases where consumers who had done everything right and tried to stay in network still got socked with huge, surprise, out-of-network medical bills. This type of financial hit can knock a family down for the count and that simply isn’t fair. Starting today this law provides critical new protections for consumers, holding them harmless from these devastating, surprise medical bills.”

The new law going into effect today holds consumers harmless by taking consumers out of the process for determining out-of-network reimbursements for surprise and emergency bills – essentially treating consumers as if they stayed in-network. Instead, it creates a fair and independent mediation process, which determines the appropriate reimbursement between doctors and insurers without involving the consumer.

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Under the law, a consumer will not be charged the out-of-network cost for a surprise bill if they did not have the opportunity to avoid it and stay in network. All health plans must cover at the in-network cost any out-of-network provider bill for emergency services, as well as surprise non-emergency bills for physician services in a hospital or surgical facility when an in-network provider is unavailable; the consumer was not informed in advance; or when a physician refers the consumer to any out-of-network provider.

The new law also requires enhanced consumer disclosures from insurers, doctors and hospitals, allowing consumers to more easily know which providers are out-of-network, how much those providers expect to charge, and how much the insurer expects to cover. Those disclosures will help prevent consumers from getting hit with surprise bills in the first place. In addition, all health plans will have to meet minimum standards for adequate provider networks before offering coverage. And all health plans must allow the consumer to go to an out-of-network provider at the in-network cost share if the insurer does not have an appropriate in-network provider, as decided by an independent review. The law also makes out-of-network claim submissions easier for consumers, among other protections.

“New York state is implementing the nation’s strongest and most comprehensive protections against surprise medical bills, so this is a great day for consumers,” said Chuck Bell, programs director for Consumers Union, publisher of Consumer Reports. “We applaud the Cuomo Administration, Superintendent Lawsky and the Department of Financial Services for squarely addressing this issue, which generated literally thousands of health consumer complaints. Through this new law, consumers will be able to avoid getting most surprise medical bills in the first place, and avoid protracted financial disputes when problems do arise. We also thank New York’s health plans, hospitals and medical providers for working cooperatively to implement the law, and alert consumers to these new rights, disclosures and billing protections.”

“High medical bills threaten many New Yorkers’ kitchen table economies, and surprise out-of-network insurance charges can be the straw that breaks the camel’s back,” said Beth Finkel, State Director for AARP in New York State. “The last thing patients struggling to recover need is to be thrown into the middle of disputes between doctors and insurance companies. This new law comes as a huge relief, especially for the many older New Yorkers on fixed or limited incomes. AARP thanks Governor Cuomo and Superintendent Lawsky for their leadership on this critical issue, and commends them and the Legislature for making New York a national leader by putting these groundbreaking consumer protections on the books.”

“Today New York puts into effect the most comprehensive set of rules in the nation to protect consumers from traps and obstacles to getting care through health plan provider networks,” said Mark Scherzer, Legislative Counsel to New Yorkers for Accessible Health Coverage. “The law requires that all health plans have provider networks adequate to meet consumers’ needs, guarantees coverage for treatment by uniquely qualified specialists who are not in the network, establishes an independent review system to resolve disputes over surprise bills and access to specialists without the need for a lawsuit, and empowers consumers by giving them up to date information on doctor and hospital fees and network participation. It will serve as a national model. We applaud the Governor, Assembly and the Senate for achieving this milestone and the Department of Financial Services for implementing it on schedule.”

“Today, New York launches the strongest law on the books anywhere protecting unsuspecting consumers from surprise medical bills,” said Elisabeth Benjamin, Vice President of Health Initiatives at the Community Service Society of NY and a co-founder of Health Care for All New York. “CSS’s Community Health Advocates assistance program has helped hundreds of consumers who wake up from an in network surgery or procedure only to learn that they will be stuck with massive bills from an unexpected out-of-network anesthesiologist or ‘assistant’ provider. This practice had to stop. And now it will.”